The WSTA is urging the Treasury to abandon its alcohol tax escalator after retail figures for 2010 showed the UK wine market in decline with sales down 2% and sales of spirits flat.

The tax escalator threatens to deliver a 6.8%¹ tax increase on alcohol next month. If it goes ahead it would mean that in just three years tax on wine had increased by 35% and tax on spirits by 30%.

The 2010 retail data² shows that sales of wine and spirits fell in pubs and restaurants (down 4%) and shops (down 1%) as consumers reined in their spending. Against this backdrop the small increase in the value of wine sales (up 3%) reflects the impact of tax increases while industry has had to absorb rising costs of energy, transport and raw materials.

WSTA Chief Executive Jeremy Beadles said:

"With the recent VAT increase adding to the weekly shopping bill, it's no time to force drinks prices up further with another inflation busting tax increase.

"The scale of tax rises on wine and spirits in recent years has cost thousands of jobs and made matters worse for households struggling to cope in difficult economic circumstances.

"Abandoning the tax escalator would help hard-pressed consumers and a sector which ought to be part of the drive to restore economic growth in the UK."

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Notes to editors

¹ This is based on a RPI to December 2010 of 4.8% (source: ONS, January 2011). To date HM Treasury has based its calculation on combination of RPI for 6 months prior to Budget and RPI forecast for 6 months post-Budget.
In March 2008 the Chancellor announced a 9% increase in alcohol duty and his intention to introduce a 4 year tax escalator, increasing duty rates by 2% above the rate of inflation from the time of the 2009 Budget. In March 2010 the Chancellor announced that all alcohol duty rates would increase by 2% above inflation for two further years, until 2014-15.

WSTA
The WSTA is the UK lobbying organisation for the wine and spirit industry representing over 330 companies producing, importing, transporting and selling wines and spirits.
We campaign to promote the industry's interests with governments at home and abroad.
We work with our members to promote the responsible production, marketing and sale of alcohol.

Responding to the Government’s announcement that it will ban the sale of alcohol below the level of excise duty and VAT, WSTA Chief Executive Jeremy Beadles said:

“We have consistently argued for a ban on the sale of alcohol below the level of duty plus VAT on the basis that these are both consumer taxes and therefore the cost should be passed on to the consumer. This is the practical way to implement this policy.

“It is important this policy is applied nationally. We are sure Ministers will want to ensure it is not undermined by separate and different price initiatives by local authorities.

“It’s equally vital to recognise that alcohol pricing and taxation cannot provide the solution to alcohol misuse. What’s needed is education and rigorous enforcement of laws to address misuse and related anti-social behaviour.”

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Notes to editors:

WSTA
The WSTA is the UK organisation for the wine and spirit industry representing over 310 companies producing, importing, transporting and selling wines and spirits.
We campaign to promote the industry’s interests with governments at home and abroad.
We work with our members to promote the responsible production, marketing and sale of alcohol.

The Wine and Spirit Trade Association today welcomed confirmation that new regulations on measures for fortified wine will continue to allow 100ml servings.

Previous drafts of the regulation published by the last Government would have restricted fortified wine servings to 50ml or 70ml whereas sherry is customarily served in a 100ml measure.

Following concerns raised by the WSTA, the National Measurements Office has confirmed that the new regulation, set to come into force in October 2011, will allow multiples of these measures to be served.

The new regulations will also permit smaller servings of wine to allow samples to be sold and allow the ‘schooner’ 2/3 pint measure for beer and cider.

“We’re pleased the National Measurements Office has responded positively to the concerns we raised. This flexibility will allow different fortified wines to be served in appropriate measures and, along with the move on ‘sample’ size wine servings, offers some much needed de-regulation that the whole trade can welcome.”

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Notes to editors

WSTA
The WSTA is the UK lobbying organisation for the wine and spirit industry representing over 310 companies producing, importing, transporting and selling wines and spirits.
We campaign to promote the industry’s interests with governments at home and abroad.
We work with our members to promote the responsible production, marketing and sale of alcohol.